IG Group suspends opening of new accounts following platform pandemonium
IG Group has suspended all account opening for new clients following the chaos of Friday’s outage, demonstrating that the company’s b-book execution model is not able to cope with even minor stock trading volatility
This morning, following IG Group’s platform outage on Friday last week which resulted in a vast number of traders being unable to access their accounts or contact any IG Group staff during a period of market volatility, the company has suspended the opening of accounts to all new customers.
In a message to clients, IG Group CEO June Felix stated “We are in the midst of an unfolding situation in global markets which is attracting a significant number of new traders to trading platforms to buy particular stocks in a coordinated way.”
“This has caused a significant increase in trading volumes and demands on our platform. As a result of this some clients have experienced disruption to service. This has fallen short of the high standards we set ourselves and the service you deserve. For those clients who have experienced disruption, I would like to offer you my sincere apologies, and assure you we are addressing these issues as a matter of urgency” continued Ms Felix.
“We took a number of steps immediately and continue to implement additional measures to avoid any further disruption” continued the message.
“Our teams are working around the clock to improve the resilience, login and trading capacity of the platform, we have significantly increased the number of support staff available to assist you, with 24-hour support available at [email protected]. If you have emailed the helpdesk we will get back to you” said Ms Felix’s message.
“We have temporarily paused new account opening so that we can focus on providing our existing clients with the service they deserve.
We have also made the difficult decision to temporarily suspend new trading on GameStop and AMC Entertainment. We fundamentally believe in empowering our clients and enabling them to trade what they want, when they want, how they want. This decision has been entirely motivated by our desire to ensure our platform and services remain fully operational for existing clients, as we prioritise giving you the best service we can” stated Ms Felix.
“We will continue to closely monitor this quickly evolving situation. We will bring in additional measures if necessary and seek to remove any trading restrictions as soon as possible” she concluded.
This action has been the latest in a line of reactive measures, with IG Group’s platform having experienced several outages during the course of 2020, clearly demonstrating that brokers which b-book trades and create their own market from their own dealing desk rather than process trades via live global markets using Tier 1 interbank liquidity providers and prime of prime brokerages are ill-equipped to provide uninterrupted access to markets during times at which volatility may cause the broker to lose out, considering that retail brokerages which warehouse trades are reliant on client losses for their profits.
During last week’s outage, FinanceFeeds intervened in order to assist traders that had not been able to contact IG Group as the company ws not answering telephone calls from traders, leaving them exposed to substantial risk.
IG Group’s approach to us was that our reporting contained ‘inaccuracies’, which is a well worn method of insinuating that their activities can be justified.
A senior executive at IG Group explained to FinanceFeeds “Where a client believes they have made a loss as a result of not being able to log into their account, they can raise that with IG and we seek to find a means of redress so they are not materially worse off.”
Yes, indeed they could if they could get through on the phone.
IG Group’s executive continued “The suggestion that we somehow profit from such instances is false. We also don’t run a B-book business model – we externally hedge positions and do not take the opposite side of a clients trade.”
This rather interesting refuting of the truth led to our involvement between clients and IG Group, which has now resulted in traders being able to be in direct contact with senior members of staff at IG Group, hence we can consider this to be a positive move toward transparency.
Subsequently, we were able to get one particular trader to the very top of the management structure at the company, and dialog has begun. We will report on the outcome.
One thing is for sure. IG Group is a publicly listed company on London Stock Exchange and has a huge domestic market client base. This was all achieved via the excellent stewardship of former CEO Peter Hetherington.
Mr Hetherington’s unique leadership style was not to everyone’s taste, however he was without question an immaculately organized and exemplary CEO and in FinanceFeeds opinion, his leadership alone led IG Group to the high status it enjoyed for many years.
Speaking to a senior FX industry executive yesterday on this matter, it appears there are many who agree. “Peter was not everyone’s cup of tea. He could be incredibly unpleasant at times, however there is no doubt that he is the reason IG Group is what it is” said this particular executive.
This shows that the current trend for ‘woke’ leaders, political correctness, smiling for the camera and poster people is not the way to run a business.